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Welcome to the David Victor Vector blog. This is blog that covers religious observances around the world international affairs and global business. This blog describes religious holidays for most major religions as well as raising issues dealing with globalization, international business ethics, cross-cultural business communication and political events affecting business in an integrated world economy. I look forward your discussion and commentary on these articles and subjects. Enjoy!

Tuesday, January 10, 2012

Year of the Dragon: Business Impact

Monday, January 23 marks the start of the Asian Lunar New Year or Chinese New Year. It is the beginning of the year 4709 (in some traditions, 4710) in the Chinese system, which is the Year of the Water Dragon.

Today's post is the first in what will be a series of posts discussing the Asian Lunar New Year in general and the Year of the Dragon in particular. Today, we will look at some of the business impact of the event. Future posts will look at the background and significance of the Asian Lunar New Year from both cultural and religious perspectives as well as the significance of the Year of the Dragon itself this year. Other posts will discuss ways in which this holiday is celebrated in different cultures. A final post will point out major Year of the Dragon celebrations and parades around the world.

World's Busiest Travel Day

The Asian New Year

The Asian New Year is arguably the most widely celebrated holidays on the planet, whatever the year. Because the celebration generally means that families gather together, the holiday is annually the single busiest travel day. For example, during the Chinese New Year last year in 2011, an estimated 2.556 billion passenger trips took place within the PRC alone.

PRC officials estimate that 3.2 billion peoplewill be traveling in Chinafor the Year of the Dragon

This year, the rush has already begun, with the official Chinese travel season starting on Sunday, January 8. PRC government officials estimate that this year there will be 3.2 billion travelers in China.

This puts considerable pressure on China's travel infrastructure. Speaking to Agence-France Presse news, China's chief transportation official Liu Tienan estimated record numbers for the Year of the Dragon, indicating that the People's Republic of China would see 2.55 billion road passengers (an 11.6% increase) and 32 million air trips (an 10.8% increase).

Year of the Dragon Baby Boom and Marriages

As will be discussed in upcoming posts, people born in the Year of the Dragon are generally considered natural leaders and merit respect and honor. It is therefore a very auspicious year in which to be born. As a result, the Year of the Dragon results in a baby boom in East Asian countries every 12 years.As China Radio International explained in a recent broadcast:

Experts predict births will climb by five percent because the icon of China's emperors symbolizes power and wealth. The emerging dragon year baby boom in the country is expected to provide lucrative business opportunities for infant-products makers and early-learning institutions from home and abroad.

Nor is this at all limited to the PRC. Baby booms are expected throughout East Asia. Singapore

is expecting between a 10-20% increase in babies for the year and Taiwan is expecting a 20% increase.The trend is entirely predictable each time the Year of the Dragon appears in the 12-year cycle.. As the Taipei Times notes:

Statistics from the Ministry of the Interior showed that the first dragon-baby boom in Taiwan occurred in 1976, with a total of 425,000 babies born that year — 50,000 more than in 1975. In the next year of the dragon, 1988, 342,000 babies were born, 208,000 more than in 1987. In 2000, the most recent year of the dragon, 202,000 more babies were born than in 1999.http://www.taipeitimes.com/News/taiwan/archives/2011/05/16/2003503374

Indeed, the impact has already been felt. For example, Taiwan’s fertility clinics hit record numbers in 2011 as parents tried to ensure that they would have children in the Year of Dragon. Relatedly, elite hospitals in Hong Kong, Singapore, Shanghai and Seoul have all experienced bookings, as have nearby hotels. As an example, the Korea Herald reported that reservations for February 2012 increased by 130 percent at the Seoul Palace Hotel and by 30 percent each at Westin Chosun Hotel and J.W. Marriott Hotel compared to the same month this year. Other venues where reservations did not dramatically increase yet are closely observing the fuss about the black dragon year. http://www.koreaherald.com/lifestyle/Detail.jsp?newsMLId=20111230000343

Another reason for the increased hotel reservations is that it is also considered good luck to marry during the Year of the Dragon. The Wall Street Journal, for example, reported that marriages in China are expected to spike by 12% in the Year of the Dragon.In Hong Kong alone, 60.000 couples have already registered to be married over the year. Throughout China, couples have been encouraged not only from the good fortune of the Dragon Year but from the added good fortune of the leap year in the spring. As Isabel Steger in the Wall Street Journal explains:

Not only is it a Dragon year, but it’s also a leap year, according to the Chinese lunar calendar, with 13 months. The extra month is to synchronize the lunar year, which has 354 days, with the astronomical year, which has 365.25 days. The extra month makes it possible to have two “springs” in the year, which is auspicious. In Chinese, the word “spring” has connotations of fertility. http://blogs.wsj.com/chinarealtime/2012/01/06/hong-kong-developers-look-to-the-dragon/

Gold Sales and the Year of the Dragon

Also affected by the Year of the Dragon is the price of gold. Since the Year of the Dragon is associated with wealth, many gifts given at the time will be made of gold to reinforce the symbolism. This, in turn, affects the demand for gold. Indeed, the International Business Times of Singapore reported a 20% increase in sales among jewelers and private mints.

﻿﻿﻿ In the PRC, Bullion Street and other gold sales monitors report that shops selling gold bars, gold dragons and related gold items have been so heavy that by the first week of January many retailers have been unable to meet demand. Additionally, jewelers and small shops that never before had sold gold bars are now opening up sections devoted to doing so for the course of the New Year.
﻿

Perth Mint Year of Dragon gold coin

Mint of NiueYear of Dragon Commemorative Piece

Special Year of the Dragon gold coins have been issued in limited editions by the Perth Mint in Australia, the Singapore Mint, the Royal Canadian Mint, the People’s Bank of China, tje New Zealand Mint, and Monnaie de Paris, the Mint of Finland, and the Mints of the tiny Pacific nations of Niue and of the Cook Islands.

Other Business Impacts

Because dragons and tigers are compatible animals in the Chinese zodiac, Tiger Beer is running special promotions to capitalize on this. Sean Koh, marketing manager for Tiger Beer explained at the Year of the Dragon promotion launch:

Consumers buying Tiger beer (or its partner beers of Guinness, Anchor and Heineken) have the chance of winning one of 90,000 prizes of gold sets or cash. The promotion is directed at the Year of the Dragon celebrations, having started in mid-December and will run through February 6.Nike has released a special "Year of the Dragon Pack" which they describe in a press release as follows:

Nike's Year of the Dragon Pack

All of the shoes will include iconography that pertains to the Chinese New Year and the cultural effect it has on its people. For example, the Nike Air Force 1 actually uses a black silk texture to symbolize Chinese royalty. The Air Jordan 2012 takes the number 9, which is a sign of power and achievement, and tie that in to Michael himself. Kobe is a little more multicultural, drawing from his Italian roots and his love of Kung Fu movies for his Nike Zoom Kobe 7 entry. But Kevin Durant might be headliner of this pack since he was born in 1988, a Year of the Dragon. There will also be a Nike Destroyer Jacket that comes in a special pack with the Air Force 1. http://www.examiner.com/nike-in-national/nike-year-of-the-dragon-pack-officially-revealed

For the Chinese elite market, Rolls Royce has begun selling special dragon-themed commemorative vehicles. These are enhanced with dragon embroidered interiors and hand-painted coachlines with themes adapted from Forbidden City designs. This is Rolls-Royce's first such special issue car for China, and points to its growth in that market (which is now its second largest market after the United States).

Finally, the Year of the Dragon is associated with risk-taking. Consequently, entrepreneurship and venture capital investments traditionally may also be affected positively in East Asia.

Check Back for MoreI hope this has whetted your appetite. Please check back for more in the coming days when you can read about the background and significance of the Asian Lunar New Year, the significance of the Year of the Dragon, how the holiday is celebrated in different cultures and where to find major Year of the Dragon celebrations and parades around the world.Gung Hay Fat Choy! (May prosperity be with you!)

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About Me

David A. Victor, Ph.D. is a business professor, author and consultant. He is Director of International Business Programs at the Eastern Michigan University College of Business where he is also a tenured Full Professor of Management. He teaches courses in business communication, business ethics, international business ethics, international business, and international management. Dr Victor’s book International Business Communication (Harper Collins, 1992) was the first book published on the subject in the United States. Dr. Victor is also a business consultant and co-founder of the non-profit organization One Village One World.

More About David Victor's Academic Experience

I teach at the Eastern Michigan University College of Business I am also editor of the Global Advances in Business Communication. http://commons.emich.edu/gabc/

Among other subjects, I teach Managing World Business Communication, Fundamentals of Global Business, international business ethics, international business, Business Ethics/CSR, and International Management as well as a series of "Doing Business In..." seminars for business in specific countries and regions. My course at EMU in Managing World Business Communication first designed and taught nearly 20 years ago was among the first regularly taught on cross-cultural business communication in an AACSB-accredited school.

From 1996-1997, I was President of the Association for Business Communication and helped to establish the European and the Asia/Pacific regions of that organization. In 2010, I was honored to have won the Meada Gibbs Outstanding Teaching Award, an international prize given by the Association for Business Communication. Over the years, I have received 6 grants from a variety of sources including the US Department of Education and the Federal Government of Canada. .

In 1992, I was the first recipient of the Distinguished Visiting Foreign Professorship (Graduate Level) of the InstitutoTecnologico y EstudiosSuperiores de Monterrey. I was also a Visiting Professor at the University of Antwerp in Belgium in 2008 and at the Universidade do Caxias do Sul in Brazil in 2010. I also hold classes for Saint Mary's of California's TransGlobal Executive MBA students.

About David Victor’s Consulting Experience

I have consulted since the mid-1980’s, mostly in the area of international business communication, expatriate relocation and diversity management for a range of clients including school systems, hospital networks and city and state governments as well as a wide range of companies working domestically in the United States as well as in Canada, Mexico, East Asia and Europe. I have consulted and run programs for over 150 companies and organizations, ranging from Fortune 500 companies to the state governments of Idaho, Iowa and Michigan, the American Bar Association and the US Army as well as several city governments and health systems in the US and abroad.